VAT for Free Zones

For Free Zones, Federal Tax Authority announced the supplies that will subject to Value added Tax as of January 1, 2018.

Below table outlines that will be subject to the Value Added Tax:

Free zones	VAT rate
Supplies of goods between businesses in designated zones	Considered outside VAT system
Supplies of services between businesses in designated zones	VAT rate dependent on service ignoring location
Supplies of goods and services in non-designated zones	VAT rate dependent on good/service ignoring location
Supplies of goods and services from mainland to designated zones or designated zones to mainland	VAT rate dependent on good/service ignoring location